Spotify is one of the largest music-streaming platforms around. Many people use either its free option or paid option to stream music on a variety of devices.
I listen to music a lot, and it’s one of my favorite things to do whether I need to relax or stay focused at work. I log into Spotify, and I can listen to almost any artist, album, or playlist that I’m in the mood for in a matter of seconds.
It’s convenient and easy to use.
Spotify was founded in 2006 by Daniel Elk and Martin Lorentzon. It’s headquartered in Stockholm, Sweden.
In case you’re not entirely familiar with Spotify’s platform, it’s a commercial music-streaming service that gives users access to digital content from a range of record labels and artists.
Spotify is available on many mobile device platforms, smart TV apps, and web browsers. Its platform also integrates with social media platforms like Facebook and Twitter.
Making your Spotify account more personal allows the people you’re friends with on Facebook or Twitter to see the music you’re listening to and even gives you the opportunity to share playlists, albums, and artists with those friends.
Personally, this is my favorite feature. I enjoy sharing new music that I find on Spotify with my friends and if they’re special (and lucky) enough, they’ll receive a playlist curated by me.
Users can pay $9.99 for Spotify’s premium plan or go the free route, which comes with a few ads that play every 30 minutes when listening. These ads are what generate money for Spotify from its free option.
In June 2016, the company said that it reached 100 million monthly registered users, which includes both paying and non-paying users.
On top of that, it announced in March 2017 that it crossed a huge milestone, having over 50 million paying users.
All Signs Point to an IPO
Spotify is getting its affairs in order, which could be a clear indicator that it’s preparing for its market debut.
Earlier in the year, Spotify signed a deal with Universal Music that would only allow paying subscribers to have access to certain albums.
And on May 26, 2017, Spotify settled a lawsuit with some songwriters and publishers who were alleging copyright infringement. The settlement will cost Spotify $43.4 million — a small price to pay to stay on good terms with the music industry, so they’ll allow Spotify to stream their music.
Additionally, a day before settling the class action lawsuit Spotify was involved in, it brought on four new people to its board of directors. Those four people include former Disney’s COO Tom Staggs, Cisco vet Padmasree Warrior, a former YouTube head of product Shishir Mehrotra, and Swedish investor Cristina Stenbeck.
Not to mention, earlier in the month, Spotify reported that it had hired Goldman Sachs, Allen & Company, and Morgan Stanley to advise it on its listing.
The company will most likely choose to go in a direction that’s a little more unconventional by directly listing its shares — meaning that it’ll go public, but it won’t be selling any new shares.
A direct listing would mean that investors wouldn’t be able to buy shares before the company goes public. Instead, investors will only be allowed to buy shares through the open market.
The company is possibly considering a direct listing on the NYSE, which will help Spotify avoid millions in underwriting fees for its IPO.
Spotify is valued at $8.5 billion and having a solid market debut would more than help solidify its position as a leader in music streaming, as well as further revolutionizing streaming as the future of the music industry.
It still might be a little too early to speculate about what exactly we could expect from a Spotify IPO — the main takeaway point from all of this is that we could very well see a 2017 IPO in Spotify’s future.
Until next time,
Jennifer Clark
Pro Trader Today